Novel Beta Method Occasions Rebuke From Court of Chancery in Appraisal Case

BVLaw
Court Case Digests
January 30, 2020
8742 Management Consulting Services
541611 Administrative Management and General Management Consulting Services
dissenting shareholder
beta, daubert, weighted average cost of capital (WACC), admissibility, closely held corporation, statutory appraisal, discounted cash flow analysis, projections, cost of equity, guideline companies, cost of debt

Manichaean Capital, LLC v. SourceHOV Holdings, Inc.
2020 Del. Ch. LEXIS 38, 2020 WL 496606
US
State Court
Delaware
Court of Chancery of Delaware
Timothy J. Meinhart (petitioners); Prof. Gregg Jarrell (respondent)
Slights

Summary

In appraisal proceeding, Court of Chancery adopts petitioner expert’s DCF-based model for calculating fair value, making slight adjustment to expert’s size premium; on beta calculation, court finds respondent expert’s novel approach “does not survive judicial scrutiny” and raises Daubert issues.

See Also

Manichaean Capital, LLC v. SourceHOV Holdings, Inc.

In appraisal proceeding, Court of Chancery adopts petitioner expert’s DCF-based model for calculating fair value, making slight adjustment to expert’s size premium; on beta calculation, court finds respondent expert’s novel approach “does not survive judicial scrutiny” and raises Daubert issues.

This article also appears in:
Business Valuation UpdateVol. 26 No. 4